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Every few years, a new and trendy financial product seems to pop up in our debt markets. Think crypto-currency, EB-5 financing, opportunity zones, fin-tech and crowdfunding. Some of these phenomena stick around for the long haul. Others simply fade away as investors lose interest (which they inevitably do when the returns do not materialize or public interest wanes). One of the newer financial products to hit the markets is “sustainable lending.” Also referred to as…
On April 4, 2016, the U.S. Treasury Department and the Internal Revenue Service (“IRS”) issued proposed regulations ostensibly aimed at curbing inversions and earnings stripping, by companies located in the U.S. with overseas ties. If finalized, these regulations would become retroactive to April 4, 2016, and would fundamentally shift the way debt and equity are characterized by a broad range of companies doing business in the United States. Far from simply making it more difficult for…
On March 31, 2016, the Office of the Comptroller of the Currency (“OCC”) issued its much anticipated white paper on the role of financial technology (“FinTech”) in the financial services industry. The paper, titled Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective, opens a two-month window in which banks, FinTech companies and lenders may engage in discourse with the OCC regarding the role of federal agencies in regulating FinTech. Comments on…
On December 23, 2015, the Delaware Supreme Court affirmed the Delaware Chancery Court’s award of $195 million to PharmAthene, Inc. (“PharmAthene”) as compensation for lost profits (a/k/a expectation damages) on account of the failure by its counter-party to a term sheet to negotiate a license agreement in good faith.  The judgment was affirmed notwithstanding the fact that the obligation to negotiate in good faith was set forth in a non-binding term sheet. Term sheets and…
Citibank, N.A. has asked a federal district court to bless its $23 million settlement in a class action lawsuit alleging a wide-ranging conspiracy among banks to fix yen-denominated London Interbank Offered Rates (LIBOR) interest rates between 2006 and 2010. The settlement is the first of its kind in the case. The lead plaintiff in the litigation, Jeffrey Laydon, urged the court to approve the settlement, with his counsel describing it as an “ice breaker” that…
Late last month, a New York state judge denied AIG’s request to delay approval of Bank of America’s $8.5 billion settlement with private investors in connection with certain mortgage-backed securities that had soured. Bank of America agreed to the settlement in June 2011 in order to resolve claims brought by institutional investors such as Black Rock, Metlife and Allianz SE’s Pimco. The investors alleged that Countrywide, acquired by Bank of America in 2008,…
The real wolves of Wall Street–sixteen of America’s largest banks–could end up shelling out more than $50 billion to secure settlements from the federal government in connection with their alleged roles in the mortgage crisis. Of this amount, up to $15 billion would go directly to affected homeowners in the form of cash payments and/or loan reductions. Penalties Calculated Against JPMorgan Settlement As first reported by The New York Times, industry insiders are using JPMorgan…
Richmond, CA is first municipality to use eminent domain on underwater mortgages Richmond, California’s leaders approved a controversial plan earlier this month to become the first municipality in the nation to use eminent domain to rid itself of underwater mortgages. The plan was approved by the Richmond city council 4-3 following a long and contentious public meeting that began on a Tuesday evening and rolled over into Wednesday’s predawn hours. Specifically, the council approved Mayor Gayle McLaughlin
Investing in the housing market’s recovery President Obama officially threw his support behind a bipartisan push to replace beleaguered housing giants Fannie Mae and Freddie Mac during a speech to an Arizona crowd on Tuesday. “As home prices rise, we can’t just re-inflate another housing bubble,” Obama admonished.  Rather, government should invest in the housing market’s recovery by working to “lay a rock-solid foundation to make sure the kind of crisis we went through never…
The U.S. Securities and Exchange Commission is investigating bankrupt Ally Financial mortgage unit Residential Capital, LLC, for possible misconduct and misrepresentation in its mortgage lending and underwriting practices. The SEC disclosed in court documents on Monday that it formerly commenced an investigation in February of this year to probe possible fraud in the offer and sale of mortgage-backed securities by ResCap. The agency was forced to reveal the existence of the investigation in order…